Last week it was announced the median migrant wage under the Accredited Employee Work Visa (AEWV) will increase to $29.66 from February 2023.
The AEWV replaced six former migrant visas and was introduced in July.
A migrant worker, who wanted to remain anonymous, said there was a great deal of confusion as to what businesses obligations were around visas this year.
“It was disheartening to be treated the way I was under the visa, and the division it created between those who had the visa, and those who didn’t. There was controversy regarding pay scale between those being paid more than they would have on another visa, as well as being paid more than New Zealanders, ” the migrant worker said.
Businesses had to provide 30 hours of work per week and had to pay that, they said.
Presently the AEWV median wage is $27.76 per hour.
A Kiwi worker, wanting to remain anonymous, said it was essentially two different pay matrices, which was creating a huge disparity.
“Kiwis were getting paid around $24 an hour, and they [migrant workers] are sitting at $27. It’s a big difference,” they said.
The real ones that get screwed are the New Zealanders, the Kiwi worker said.
Ministry of Business, Innovation and Employment (MBIE) immigration policy manager Andrew Craig said employers should not be paying migrants more or, or less, than similarly skilled New Zealanders for the same role.
“The government’s immigration rebalance is focused on moving New Zealand to a higher wage economy, increasing the skill level of migrant workers, and encouraging employers to offer competitive wages and improve career pathways,” he said.
Immigration New Zealand stated many tourism and hospitality roles have been provided an exception, with a lower wage threshold of $25 an hour remaining until April 2023, where it will increase to $28.18 across some roles within those sectors.
The median wage has been determined by Stats NZ and based on income collected from the Household Labour Force Survey.
Federated Farmers immigration spokesman Richard McIntyre said the majority of new migrant farm staff are employed under AEWV.
“All industries are struggling to find New Zealanders who are willing and able to do the job but for farm employers in remote rural areas the challenge is even greater. Farmers need people in gumboots on the ground to put cups on cows and drive tractors so they are able to focus on the more technical and management roles on farms,” he said.
The concern was the wage increases would add additional costs, not just to farm employers, but also the downstream and upstream industries that service agriculture and business in the economy, he said.
“Ultimately it will be the New Zealand public who pay the price on the supermarket shelf,” Mr McIntyre said.
New Zealand Institute of Economic Research principal economist Bill Kaye-Blake said the wage increase will take profit away from businesses, putting the strain on them.
“What you’re doing is increasing the price of labour for people who depend on those workers. You’re making it more likely that they will hire local people and less likely they will hire overseas workers,” Dr Kaye-Blake said.
It is hard to say whether that is good or bad, he said.
“The reason I say that is because, in New Zealand we have low productivity growth in most of the economy and one of the reasons for that, is the low pay that we have in the service industry.”
As long as businesses can get away with paying people low wages they are not going to invest in the labour saving technology or better systems in the businesses, he said.
“The problem is the difference between looking at things in the moment, and looking at things over time,” he said.
In the moment it causes a bit of pain and businesses have to adjust and they are going to complain, but over time it actually means that there are better ways available, he said.
“People are more likely to go into careers, therefore better training and it also pushes businesses to invest more,” Dr Kaye-Blake said.
Stats NZ reported the NZ GDP increased 1.7% in June 2022 quarter.
The services industries, which make up about two thirds of the economy, were the main contributors to the 2.7%. increase.